Indian Automobile Case Study

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ABSTRACT
India’s automobile industry is one of the key drivers that promote the economic growth of the country. Personal vehicle ownership in India is increasing at a fast pace as a result of rapid economic growth witnessed in the last two decades. The rise in disposable income (in both rural and urban sector), presence of a wide variety of options to choose from and availability of easy finance are the main drivers of automobile sales in India. The relative popularity of the various segments of vehicles based on their size, price and usage are also undergoing sea changes. Especially in a country like India where motorized and non-motorized informal transports are a major mode of travelling (along with public transport in bigger cities), a fast-paced shift towards private motorized transport is a substantial change. The post globalization period has witnessed the footprints of global automobile majors striding towards India to tap India’s highly potential vehicle market. With manufacturers fighting to capture the biggest slice of the pie in one of the fastest growing automotive markets in the world, the Indian consumer is being offered with extravagantly larger set of vehicles in …show more content…

The negative aspects of this system highlighted the need for some refinement in the policy framework and thereby paved the way to the reforms of that took place in the late sixties. Monopolies and Restrictive Trade Practices (MRTP) in 1969 and Foreign Exchange Regulation Act (FERA) in 1974 were implemented with the aim of regulating monopoly and foreign investment respectively. But, unfortunately, these controlling mechanisms were resulted in: (a) many companies operating below minimum scale of efficiency; (b) under-utilization of capacity; and (c) usage of obsolete

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